Categorized | News

With 1st Amendment To Dodd Bill, Dems Admit Original Allowed Bailouts

For two weeks, Democrats have attacked Republicans, and Senate Republican Leader Mitch McConnell in particular, for pointing out that the financial regulation bill, offered by Senate Banking Committee Chairman Chris Dodd (D-CT), doesn’t end “too big to fail” and actually allows for future taxpayer bailouts.

Before the bill came up for debate, Sen. McConnell warned, “This bill not only allows for taxpayer-funded bailouts of Wall Street banks; it institutionalizes them.” The next day, he explained, “If you need to know one thing about this bill, it’s that it would make it official government policy to bail out the biggest Wall Street banks. So if the administration is looking for bipartisan support on this Wall Street bill, they can start by eliminating this aspect of the bill — not because Republicans are asking for it, but because community bankers all across the country and American taxpayers are demanding it.”

Democrats rejected these criticisms on their face. In his weekly address that same week, President Obama declared that Sen. McConnell “made the cynical and deceptive assertion that reform would somehow enable future bailouts – when he knows that it would do just the opposite.” This week, Obama went to New York to proclaim, “[W]hat’s not legitimate is to suggest that somehow the legislation being proposed is going to encourage future taxpayer bailouts, as some have claimed.  That makes for a good sound bite, but it’s not factually accurate.  It is not true.”

Senate Democrats were no less emphatic. Sen. Dodd came to the floor many times to denounce the criticisms. At one point he affirmed, “[O]ur bill stops bailouts by literally eliminating any possibility for the government of the United States to bail these firms out.” And he later said, “They knew, at least those who’d read the bill, that those provisions had been written so tight that no one could possibly argue that too big to fail would ever be allowed again.”

But today, Democrats appear to have acknowledged that Sen. McConnell and Republicans were right all along in the very first amendment they’ve offered to the Dodd bill. The New York Times writes, “The first amendment proposed to the bill, by Senator Barbara Boxer, Democrat of California, was intended to tighten language in the bill regarding how the government would handle any future collapses of financial companies. . . . In a floor speech, Mrs. Boxer again rejected the Republican criticism, although her amendment suggested that there might have been some reason to question the possibility of future bailouts.” And The Washington Post writes, “The first proposed amendment, introduced by Sen. Barbara Boxer (D-Calif.), would prohibit using any more taxpayer money to bail out troubled financial companies. This goal is so widely shared that members of both parties have been tripping over one another to assure the public that they are best at safeguarding taxpayers’ wallets.”

Clearly, Republicans were right all along, as NPR’s Adam Davidson seemed to confirm last week. He wrote, “We at Planet Money did an informal survey of economists and regulatory experts on the left and the right. We couldn’t find any who fully endorse the reforms backed by President Obama and Democrats in Congress. . . . Take, for example, “too big to fail” — the idea that if one of the largest banks in the country gets into trouble, the government will save it with taxpayer money. ‘A vote for reform is a vote to put a stop to taxpayer-funded bailouts,’ Obama said in his speech in New York on Thursday. I cannot find any experts — of any party — who are willing to agree with Obama on this one.”

An amendment to prevent taxpayers from being on the hook for bailouts that bill still allows for is a good start, but there are many more problems with the Dodd bill that need to be fixed. Maybe on the other issues, Democrats will save everyone some time and energy and listen to Republican concerns instead of spending weeks trying to score political points off of legitimate policy critiques.

About Tom White

Tom is a US Navy Veteran, owns an Insurance Agency and is currently an IT Manager for a Virginia Distributor. He has been published in American Thinker, currently writes for the Richmond Examiner as well as Virginia Right! Blog. Tom lives in Hanover County, Va and is involved in politics at every level and is a Recovering Republican who has finally had enough of the War on Conservatives in progress with the Leadership of the GOP on a National Level.

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Tom White Says:

Nothing is more conservative than a republican wanting to get their majority back. And nothing is more liberal than a republican WITH a majority.

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